I recently traded Rambus (RMBS) July and August calls that netted about a 29% profit in about a week – but it should have been more.
Rambus shares were challenging their 52-week high, and I saw call activity ramp up, signaling that traders were positioning for a breakout and a possible push towards $17-$18 over the next two to three months.
I initiated two call options plays in Rambus based on that activity, but I kept a tight stop on the trades, and so I settled for a small profit. But I want to get back in because Rambus shares are showing strength again following a backtest to support.
Rambus looks poised to make a run at fresh 52-week highs, so I’m making a double play with two call options.
Buy to open the RMBS July 16 calls (RMBS150717C00016000) at current levels.
Buy to open the RMBS August 16 calls (RMBS150821C00016000) at current levels.
My exit target for the Rambus July calls is $0.60-$0.90. My exit target for the Rambus August calls is $1.20. I don’t have a stop loss in place for either position at this time.
Rambus’ current 52-week high is at $15.34 and was set at the beginning of June. Support is at $15-$14.75, with risk to $14.50.
Rambus resides on the Nasdaq, which surged to a high of 5,086 Wednesday. Resistance at 5,100 was challenging, but the close above 5,075 indicated that the bulls are trying to clear this level once again. Short-term support for the Nasdaq is at 5,050-5,000 and the 50-day moving average.
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